SEC sues Virtu Financial over failure to safeguard customer information
2023.09.12 17:55
© Reuters. People exit the headquarters of the U.S. Securities and Exchange Commission (SEC) in Washington, D.C., U.S., May 12, 2021. Picture taken May 12, 2021. REUTERS/Andrew Kelly
NEW YORK (Reuters) – The U.S. Securities and Exchange Commission on Tuesday sued Virtu Financial (NASDAQ:), accusing the large market maker of misleading investors by failing to properly safeguard confidential information.
In a complaint filed in federal court in Manhattan, the SEC said Virtu, whose broker-dealer unit handles about 25% of market orders from U.S. retail investors, repeatedly and falsely told customers that it used “information barriers” and “systemic separation between business groups” to protect their material nonpublic information.
According to the regulator, however, virtually all employees at the broker-dealer, Virtu Americas, were able from January 2018 to April 2019 to access such information about customers and their trades.
The SEC said the information included customer names, and the names, prices and volumes of securities they bought and sold.
Virtu and its lawyers did not immediately respond to requests for comment.
In July, Virtu said it received a Wells notice from the SEC concerning its practices. Those notices suggest that agency staff found enough information to support civil charges, and give targets a chance to respond.
